Cloud opportunity and risks

Gary Hagmueller of Zuora details the company’s journey to create a billing service in the cloud.

Interview conducted by Vinod Baya and Stephane Berthier

Gary Hagmueller is the CFO of Zuora and has an extensive background in subscription management, billing, and financial operations. Hagmueller has held executive roles in a variety of software, telecommunications, and e-commerce companies. Having helped raise and manage nearly $100 million in venture and debt funding, he has been a frequent presenter on topics such as financial best practices for emerging technology firms, subscriber valuation, fundraising for startups, and growth-company business planning.

Prior to joining Zuora, Hagmueller was CFO of KnowNow, a Kleiner Perkins–backed enterprise software firm where he raised more than $17 million in funding, managed the firm’s general and administrative (G&A) functions, and drove corporate development. In the past, Hagmueller was also the director of corporate development for NorthPoint Communications, and he held various business and corporate development roles at GTE, Verizon, and Pacific Bell.

Hagmueller received an M.B.A. in finance from the Marshall School of Business at the University of Southern California, where he was named Sheth Fellow at the Center for Communications Management. He also holds a bachelor’s degree with honors in business from Arizona State University.

In this interview, Hagmueller describes the opportunity that Zuora is pursuing by moving the billing process in the cloud and the opportunities and risks for the company’s customers.

PwC: Can you please tell us about Zuora?

GH: Zuora is the first subscription billing and payment management system for the cloud and software-as-aservice [SaaS] entities. We empower companies to build new billing and payment models, and drive their businesses to differentiate, grow, and be successful— enabled by our platform instead of being hindered by their billing systems. Although we focus on subscriptions, our model extends to any type of billing and payment model that involves a longer-term customer relationship. For instance, media businesses often use a pay-for-content model, and that is something we support. Essentially, we enable any business that has a recurring relationship with its customer.

PwC: So in some sense you have taken the billing process that is typically inside an enterprise, supported by commercial or homegrown systems, and made it available in the cloud? How did you go about doing this?

GH: Yes, that is right. The first thing was to realize that billing processes are really complex, because there are so many different permutations and use cases. We built a very dynamic, very malleable product catalog. That gave us a great degree of flexibility, and we will continue to invest in it. Probably our single biggest investment is making sure that the product catalog and all the capabilities around it remain fresh, especially because every month I see a new use case that’s just marginally different from the one that was there before.